Calif. Toxin Law Warns Consumers, But Can Burden Businesses

All over California, signs in restaurants, parking garages and other businesses warn that you could be exposed to chemicals that can cause cancer.

The disclosure is mandated by 1986 state law. If a company fails to warn consumers, it can be sued.

But a lot has changed since the law was passed: The list of toxic chemicals is longer and the lawsuits are more prolific. In October, Gov. Jerry Brown signed an amendment to ease the burden on businesses.

David Roe, one of the original architects of the law, says the intention was to fix a loophole in federal environmental regulations.

"The places where you see Prop 65 warnings are places like gas stations ... [and] hotel rooms where smoking is permitted," he says. "It is important to be warned about it. It doesn't mean don't drink coffee. It means, is this a risk you want to take among life's many other risks?"

He says the California law has been a huge success, and that consumers in the state are safer today than they ever have been. He says thousands of products have had toxic chemicals taken out of them, though you don't always hear about it.

"Because most of Proposition 65's effect is companies deciding [they] would rather switch than fess up about exposing people to toxic chemicals," Roe says.

A Changing World

In the quarter-century since Proposition 65 passed, the number of toxic chemicals it covers has ballooned from dozens to hundreds.

Eric Biber, a law professor at the University of California, Berkeley, says no one realized how common carcinogens are. Today, the list of potentially toxic chemicals is so long that it's confusing to businesses that are trying to comply with the law, and that's only half the problem.

"The law uses a citizen-suit provision in which anyone can sue a company for violating the law," Biber says. "The problem is it does create an incentive for more and more people to sue."

Biber says there has been an increase in these lawsuits over the years, with some lawyers targeting small businesses for everyday exposures, like alcohol or cigarette smoke outside a bar. They use the suit to get some money, but do not actually produce reductions in toxic exposures.

Proposition 65 suits have helped make California the most litigious state in the union, Biber says,and those lawsuits disproportionately affect small businesses.

"Businesses, mostly small businesses, paid about $22.5 million in Prop 65 settlements in 2012 alone," says John Kabateck, a spokesman for the National Federation for Independent Businesses. "That's up $11.8 million since 2007, and the real problem is that the largest proportion of these settlement funds have actually gone in the pockets of plaintiff's attorneys."

By some estimates, more than half of Proposition 65 settlement money has gone to lawyers.

The Burden On Business

For virtually all environmental law in the U.S., it's the government's responsibility to go after businesses or products that are hurting consumers. For clean water laws, the Environmental Protection Agency or state regulators stop factories from dumping toxic pollution into a river.

But Proposition 65 doesn't work like that. The state just puts out a list of chemicals that might hurt you. The responsibility is on businesses to warn consumers, and on consumers to sue if they don't.

Biber says California has been like a lab, testing a new approach to protect consumers.

"That's one of the things that was innovative about Prop 65 when it was enacted in the mid-1980s, is it flipped that burden of proof," the law professor says. "I think you end up with companies being more risk averse about toxic chemical exposure in products, [but] that can also mean it can be more costly."

That's one reason, Biber says, the notices are posted in so many place. A lot of small businesses, he says, would rather put up a notice — even if they're not sure they have any toxic chemicals — than fight it out in court.

In the amendment to the law passed in 2013, small business owners faced with a lawsuit now have a two-week grace period to comply.

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